The news that Google is releasing free satnav software for Android handsets
that will provide Street View images and turn-by-turn directions has sent
the likes of TomTom and Garmin into a spin.

Could the satnav – the saviour of many a long car journey – about to be consigned to the dustbin of history, alongside Betamax tapes and HD-DVDs?

After enjoying years of seemingly unassailable popularity with gadget fans and travelling salesmen, sat-navs could be under threat from a new breed of mobile phones that feature the sort of mapping technology that wouldn't look out of place on the most expensive TomTom.

Google has just announced that its new Android 2.0 operating system will support Google Maps Navigation, a new tool, based on Google's existing road maps platform, that will provide turn-by-turn directions, automatic re-routing and 3D street-level views. In short, pretty much everything your satnav can do, but without the need to worry about an extra bit of kit when you load up the car.

The share prices of leading satnav manufacturers, such as TomTom and Garmin, nosedived on the news. Garmin's share price dipped by 18 per cent, TomTom's by 13 per cent – a huge hit, and a clear sign that the market is taking the threat posed by Google very seriously indeed.

It's certainly an ambitious idea – the Google Maps Navigation tool will draw upon several areas of Google expertise, such as search and location-based services, to deliver clear views of the best routes, complete with finest restaurants, cosiest hotels and cheapest petrol stations along the way.

Live traffic information will be pushed directly to your Android phone, helping you to avoid jams. And users will be able to wave goodbye to the annual hassle of the satnav map update – the latest, most accurate maps will be sent to Android phones by Google over the mobile phone network, which means there won't be any of the nasty surprises so common with stand-alone sat-navs, such as being directed down a newly designated one-way street.

Street View – real, street-level photography that shows the roads, buildings and landmarks around you – will also be an excellent feature, enabling you to quickly and easily pinpoint your location in an unfamiliar neighbourhood, and visualise the remainder of your route.

With Google offering cutting-edge features like this – for free – it's no wonder the established satnav players are worried; this could make a huge dent in their market share. At the very least, Google Maps Navigation is going to drive down the cost of stand-alone satnav devices; it may even sound the death knell of the single-purpose satnav.

But there are few key things Google Maps Navigation – and other similar, mobile apps that are sure to follow in its wake – will need to address before we can start writing the satnav's obituary.

The first is speed; when you're driving on a motorway or in busy town traffic, you need to know exactly what lane you should be in, and where you need to go next. This is where modern sat-navs excel, with their advanced lane guidance, clear spoken instructions, and ability to quickly recalculate routes if you take a wrong turn.

Mobile phones, by contrast, perform less well in this respect. I tried navigating to deepest, darkest Essex using my TomTom satnav and CoPilot Live installed on my iPhone. While the satnav went about it's job reliably and without fuss, my iPhone faired less well: it kept dropping the signal, and thus spent much of the time trying to work out where we were, rather than where we should be going; it always thought we were a few hundred metres further back along the route than we were, resulting in lots of missed turnings; and it didn't get us back on the right track as quickly as the satnav did.

That wasn't the fault of the software – the CoPilot app was a delight to use, with a beautiful, simple user interface. Rather, the use of a mobile phone signal to track our route and plot our position was too flaky for the job. Even the TomTom app for the iPhone recommends users buy a special cradle for holding and charging the device as well as boosting the signal quality.

It's likely that similar problems will afflict Google Maps Navigation, at least at first. You need only look at the size of a satnav, compared to the average mobile phone, to see how difficult it would be to fit all that cutting-edge global-positioning kit in to the slim, touch-screen handsets that are proving so popular with consumers.

Google, though, will already be working on ways to resolve this problem. One solution could be "caching" maps to the device, rather than live-streaming them to the handset as you drive. Devices such as the iPhone can already cache the entire online store inventory of Ocado; with the speed at which technology and components are developing, it is not impossible to imagine that within a few years' time the core components of a satnav will be small enough to fit in to a phone, and the memory of the device will be sufficient to store thousands of miles of road layouts.

So, it seems, until such issues are ironed out, "proper" sat-navs will enjoy a stay of execution. The sole purpose of such devices is to get you from A to B as quickly and efficiently as possible, and at this, sat-navs still knock the spots off mobile apps purporting to do the same job.

Converged devices, though, are undoubtedly the future, and the all-singing, all-dancing phones we're starting to see growing in popularity are set to be the ultimate multitasking gadget, handling everything from social-networking to email, playing music or taking photos, and guiding us around town, be it on foot or in the car.

Google Maps Navigation may very well prove to be a satnav killer in time, but don't throw out your TomTom just yet.